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MANAGEMENT
RESEARCH PROJECT
ON
INSURANCE INDUSTRY
(Industrial Analysis)
Objectives and scope of the project
Suppose there are 1000 persons all aged 35 years and healthy
lives. They are insured for one year against the risk of the death.
Each person is insured for Rs.50, 000. If the past experience
indicates that 4 out of 1,000 persons, at this age are expected to
die during the year, expected amount of death claim to be paid
to the family of four persons would come to Rs. 2, 00,000. The
contribution to be paid by each of the 1,000 persons will come
to Rs. 200 per year. Thus, all the 1,000 persons share loss
caused to the 4 unfortunate families. 996 persons who survived
till one year have not lost anything as they have secured peace
of mind and a feeling of security for their family. While
insurance cannot prevent accidents or premature death, it can
help protect the family of the decreased against the loss of the
death of the main breadwinner. In return for specified payments,
insurance will provide protection against the incidents of an
uncertain event- such as premature death. The business of
insurance company called insurer is to bring together persons
who are exposed to similar risks, collect contribution (premium)
fro them on some equitable basis and pay the losses (claim) to
the unfortunate few who suffer.
Since most of the trade took place by sea, there was also the
fear of pirates. So these guilds even offered ransom for members
held captive by pirates. Burial expenses and support in times of
sickness and poverty were other services offered. Essentially, all
these revolved around the concept of insurance or risk coverage.
That's how old these concepts are, really.
Size OF INDUSTRY:
• Insured:
• Insurer:
• Policy:
• Premium:
• Claim:
It's the notice to the insurance company that under the terms of a
policy, a loss maybe covered.
• Indemnity:
• Agent:
•Broker:
• Deductible:
• Expiration Date:
• Grace Period:
Fire Insurance
Travel Insurance
Life Insurance: -
General Insurance: -
Health Insurance:
Business Insurance:
Fire Insurance:
Travel Insurance:
1907: The Indian Mercantile Insurance Ltd. set up, the first
•
company to transact all classes of general insurance business.
• Direct selling
• Corporate agents
• Group selling
• Brokers and
cooperative societies
• Banc assurance
Industry Structure
Growth
%
Total
Share (%)
ORGANISATION STRUCTURE OF
INSURANCE SECTOR
LIFE INSURERS WEBSITE
Public Sector
Private Sector
Public Sector
Private Sector
REINSURER WEBSITE
GLOBAL SCENARIO
Emerging Markets
(Total Premium, figures in $billion)
Taiwan 17.3
China 13.4
India 7.2
Israel 5.8
Singapore 5.0
Solvency Ratio:
Solvency margin is the excess of assets over liabilities
that an insurance company has to maintain as a safety margin.
All insurance companies are required to maintain the minimum
solvency ratio of 1.5 at all times as per IRDA norms. IRDA has
recently introduced the quarterly reporting of Solvency Status
for all the Insurers.
INSURANCE MARKET ENABLERS
Role of the government:
PR China 69.9 44.2 25.5 53.5 34.1 19.4 46.3 30.5 15.8 40.2 27.3 12.9 36.3
Sri Lanka 24.9 10.2 14.7 21.3 8.5 12.8 16.3 6.9 9.4 14.1 6.2 7.9 12.5
Pakistan 6.5 2.6 3.9 5.9 2.3 3.6 4.6 1.9 2.8 3.7 1.5 2.2 2.9
Bangladesh 2.9 1.9 0.9 2.6 1.8 0.8 2.5 1.7 0.8 2.3 1.5 0.8 2.1
South Africa 878.5 719.0 159.5 855.8 695.6 160.2 714.6 558.3 156.2 686.5 545.5 141.0 583.9
1326. 1389. 2569. 1203. 2471. 1285. 1186.
3000.2 1674.1 2580.8 1191.9
Australia 1 0 9 1366.7 2 4 1 3 2041.4
World 607.7 358.1 249.6 554.8 330.6 224.2 518.5 299.5 219.0 511.5 291.5 220.0 469.6
Weaknesses/Challenges